Yeltsin Oks Selling Part Of Gas Monopoly

November 03, 1998|By From Tribune News Services.

MOSCOW — President Boris Yeltsin issued a decree Monday permitting the cash-strapped Russian government to auction off as much as 5 percent of one of its most valuable assets, the natural gas monopoly Gazprom, the world's largest gas company.

Yeltsin, who was recovering from his latest illness at the Black Sea resort of Sochi, signed the order approving the auction and allowing foreign investors to take part.

The action was a rare sign of Yeltsin's involvement in tackling Russia's worst economic troubles since the 1991 Soviet collapse. He has spent little time in the Kremlin in recent months, handing control of the economy and other day-to-day duties to Prime Minister Yevgeny Primakov.

No date for the Gazprom auction was set, but the Interfax news agency quoted officials as saying the government may decide not to sell a stake in Gazprom this year because its stock price has fallen sharply. If the auction goes ahead, no more than 3 percent of the company will be sold, it added.

However, news of the sale sent Gazprom prices rising 25 percent by the end of trading at the Moscow Stock Exchange.

The government repeatedly has postponed the sale because it was hoping to get a better price. Russia's financial troubles have scared away foreign investors and driven down share prices. With the International Monetary Fund reluctant to give Russia more loans, the government has little choice but to sell more shares to pay off its huge debts.

The government holds 40 percent of Gazprom shares and said it gradually may reduce its holdings to 25 percent. Private investors in Russia and abroad hold the remaining shares.

In August, the Russian government set the starting price for a 5 percent stake in Gazprom at $1.65 billion, more than double the international market price.

Yeltsin's decree did not say whether the government would reassess the price, but unidentified officials speaking to Interfax said the starting price would be "far below" $1 billion.

Separately Monday, in a move blunt by even Russian political standards, the popular reformist politician Grigory Yavlinsky gave Primakov a letter seeking corruption investigations of the prime minister's highest-ranking aides, two subordinates directly beneath them and a ranking official of the state tax service.

The letter is signed by three members of Yavlinsky's Yabloko political faction, which holds a handful of seats in the lower house of parliament.

But the message belonged to Yavlinsky himself, who said Monday that "corruption is an absolutely rotting element of all power bodies, and probably most of all in the Russian government."

Among 16 specific charges, Yavlinsky's letter questions whether First Deputy Prime Minister Yuri Maslyukov, a Communist and the government's senior economic adviser, steered government money or favors to businesses in which he or his relatives held an interest.

It also asks whether First Deputy Prime Minister Vadim Gustov, former governor of the Leningrad region, has funneled favors to businesses that financed his gubernatorial campaign.